The business of crayons is not popular in Nigeria. But those who are in it always have good stories to tell.
Bukola Baruwa is one of the few entrepreneurs in the country tapping into the crayons industry. Bukola runs a company called Yembar Ventures, which she started in 2012. She recently set up a firm—Wurabelle Nigeria Limited—to provide business support services for the micro, small and medium enterprises.
When Bukola started the crayon business in 2012, she did not see the big potential in it until 2017 when her eyes were opened to the endless possibilities in it.
Today, the entrepreneur produces wax crayons for children between nine months and 10 years.
“I was basically doing it for my children. It was in 2017 that I had to do a business plan and somebody opened my eyes to see how big the business was. I went back and looked at Crayola (American crayon maker) and found out that it was big business. I went to Enterprise Development Centre (EDC), which is the arm of the Lagos Business School, where I realised that I was sleeping on a gold mine,” she tells Start-Up Digest.
An entrepreneur with a solid financial background and experience, Bukola started with producing party packs at the early stage before being prodded by schools to produce crayons for them.
The entrepreneur, who is a 2018 product (mentee) of the Lagos Chamber of Commerce and Industry (LCCI) Mentoring Programme, believes that crayon business in Nigeria has a N9.2 billion market.
“The business is a N9.2bn market, because we have up to 300,000 private schools in Nigeria. I assume that every school should buy a minimum of five crayons,” she says.
“Because of the way I have marketed myself, I now supply to 50 schools. However, I am running away from many of them as I can’t even meet their demands,” she discloses.
Bukola explains that she sells to schools, rather than in open markets.
“We realised that for most of the schools, it is easier to personalise those brands for them. So, most of the time, we package the crayons in such a way that you can just place them in each class for the pupils to use, without them having to buy extra packaging,” she says, when asked what distinguishes her from any other crayon maker in the country.
But why is Bukola not meeting the ballooning demands of her customers?
“I do not have the required machines,” she answers. “I have done two fabricated machines in Nigeria—at Ojota in Lagos—but they are not giving me the required service. Right now, the second one is with the fabricator. The basic challenge for me is the machines. If I have good machines, I can actually do 5,000 packs of 36 pieces of crayons in a day,” she discloses.
“I spoke with someone in China who was ready to send me a machine, but the cost came to N50 million. These are things that are really drawing us back. I have contacted the Bank of Industry but they asked me to import the machine before they could approve the loan. The Lagos State Employment Trust Fund (LSETF) is doing N5 million, but this wouldn’t help my case. The only thing that can help my case is anything above N10 million. The two I have at home are actually N500, 000 each. So I have two machines for N1 million sitting there idly. It has actually been a very long journey but at the same time very rewarding,” she narrates.
Regarding what motivated her to start the crayon business, the entrepreneur, who is the class president of the 2018 the LCCI Mentoring Programme, says it was down to her children and an inability to get the right crayons while looking for them.
“I like colours. There was a time in 2012 when we were looking for crayons. We were only seeing the high-ended ones. We were not seeing the wax crayons. But by the time we saw wax crayons, they were China-made. And the designs were not good enough. One day, while my children were playing with crayons, they did not take the crayons off the cooker. The crayons melted and we had to pour into a tomato paste to solidify.”
She says her father, who is an engineer, first taught her how to make crayons.
She explains that prices of crayons rose from N250 to N450 in 2016 and have not changed since then,
“All the raw materials are imported. When you calculate the kg you buy and what it can produce, by the time you factor in foreign exchange, there will only be little left for you. If you bring in raw materials and produce them here, it will create jobs and give schools more presence because you can use some of those children as brand ambassadors,” she states.
Despite the foreign exchange challenge and weakness of the naira, Bukola says the business is worth doing.
“I have done my business plan and if I want to be conservative, I will put the return on investment (RoI) at 40 percent. I have a mentor who has been telling me to take it easy and after we did the RoI together, we agreed to put it at 40 percent,” she tells Start-Up Digest.
The entrepreneur has a solid financial background, having worked in different financial institutions for a number of years. She says the experience she garnered from the financial sector has helped her a lot.
“The experiences I got from the financial sector has really helped me, because right now, when I am talking, I am able to see the end from the beginning and I am able to think through the process. If I had not worked in the financial sector, I would have practically jumped into anything.”
Bukola says she was supposed to get a grant from the Nigerian Growth and Employment Project(GEM) but has not been able to.
“It is really disappointing because I would have got somewhere by now. But I had to go back to my small business and I do it from the back of my house,” she regrets.
She has some pieces of advice from younger and upcoming Nigerians.
“The problems have always been there. I remember when I used to work in a commercial bank, the big issue was still funding. I worked in the financial industry for 25 years. So the problems are always there, but the challenge is that a lot of times, some of the things we need to start with do not require much money. When I started party packs, I got money from family and friends.
“So I advise youths to start up something. Take that thing you have thought about, research into it and look for substitutes that will help you get the same value.”